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Paying People to Turn Off the Fridge · What's Your Problem?

0:15
Speaker 1: Pushkin. We're in the middle of this profound energy transition.
0:24
Speaker 1: Solar panels and wind farms are now cheaper to build
0:28
Speaker 1: and install than fossil fuel power plants, and they're coming
0:31
Speaker 1: online fast. This is great news, But there is always
0:36
Speaker 1: a butt in stories about renewable energy, and that butt
0:40
Speaker 1: is often about the intermittent nature of a lot of
0:44
Speaker 1: renewable power. What do you do when everybody's running their
0:47
Speaker 1: air conditioner, but it's a cloudy day with no wind,
0:50
Speaker 1: and you can't generate enough power to meet demand. What
0:54
Speaker 1: you do right now is you fire up what's called
0:56
Speaker 1: a peaker plant, an expensive, inefficient fossil fuel power plant,
1:01
Speaker 1: to make up that difference. If only there were a
1:04
Speaker 1: way to get people to cut back on their power
1:06
Speaker 1: usage right at those moments, just enough to spare us
1:10
Speaker 1: from having to turn on those crappy peaker power plants.
1:17
Speaker 1: I'm Jacob Goldstein and this is What's Your Problem, the
1:20
Speaker 1: show where entrepreneurs and engineers talk about how they're going
1:23
Speaker 1: to change the world once they solve a few problems.
1:26
Speaker 1: My guest today is Matt Dusterburg, co founder and president
1:30
Speaker 1: of ome Connected by the Way. That's o HM, the
1:33
Speaker 1: unit of electrical resistance. They're in the power business, not
1:36
Speaker 1: the meditation business. Matt's problem is this, how do you
1:40
Speaker 1: build a business around getting people to save energy, not
1:43
Speaker 1: all that much and not all the time, but just
1:46
Speaker 1: enough at just the right time. The answer, spoiler alert,
1:51
Speaker 1: you give them money. So I think to really understand
1:57
Speaker 1: how your company works, I think we should start with
2:00
Speaker 1: just how does the market for electricity in California work?
2:05
Speaker 1: Because it's it's weird and dynamic, and it's sort of
2:07
Speaker 1: keyed up to your whole business. Right, Yes, that's right,
2:10
Speaker 1: and it really the inception of this came from deregulation,
2:14
Speaker 1: which happened in the early two thousands, and it basically
2:17
Speaker 1: created a market where you can buy and sell electricity
2:21
Speaker 1: on a daily or hourly basis. So you can go out,
2:25
Speaker 1: if you're a market participant, and buy ten megawatt hours
2:28
Speaker 1: of electricity at a certain price, and that's a market
2:31
Speaker 1: define price. Now, what happened to be clear that the
2:34
Speaker 1: people buying that are our power companies are PGN E
2:38
Speaker 1: or whoever the company is supplying power to people in California. Right, Yes,
2:42
Speaker 1: so PGN SDG are the usual suspects, and the price
2:46
Speaker 1: swings wildly right. I think this is a key maybe
2:49
Speaker 1: the key thing for your business is how different demand
2:54
Speaker 1: is across even one day, and how big of a
2:57
Speaker 1: deal that difference is. Right, That's absolutely right. And this
3:01
Speaker 1: is something that no one really understands because most people
3:04
Speaker 1: are just paying a flat rate, but prices vary on
3:07
Speaker 1: the order of force sense per kilowatt hour, which is
3:11
Speaker 1: what normally it is. It's a eighty to ninety percent
3:14
Speaker 1: of the time, it's four sense to a dollar a
3:17
Speaker 1: kilowatt hour. So it just very quickly between those and
3:22
Speaker 1: in fifteen minute periods. So it would be like if
3:25
Speaker 1: you were like you bought gas on the way to
3:28
Speaker 1: work and it was four bucks a gallon, and then
3:30
Speaker 1: you looked on the way home from work and it
3:31
Speaker 1: was one hundred dollars a gallon, right, and then a
3:34
Speaker 1: few hours later it was back to four. Like it's
3:36
Speaker 1: that intense, it's that wide of a jump. That's absolutely right.
3:40
Speaker 1: And one really interesting stat is twenty percent of all
3:43
Speaker 1: costs come from only one percent of the hours. And
3:47
Speaker 1: just to be clear, why is it that the cost
3:51
Speaker 1: behaves that way, Like other things don't work that way?
3:54
Speaker 1: What is it about electrical power that makes these peak
3:57
Speaker 1: demand moments so expensive. So at certain moments in the
4:02
Speaker 1: grid you would need to actually turn on a new
4:05
Speaker 1: gas power plant. It has to basically turn on from
4:09
Speaker 1: not running at all to turning on to deliver fifty maguats,
4:13
Speaker 1: and often these are peaker power plants, and a peaker
4:16
Speaker 1: power plant it's super inefficient, it's like one third of
4:20
Speaker 1: the efficiency of regular power plants, and it's really pollutive,
4:24
Speaker 1: it's really bad for the environment, and it's really expensive.
4:28
Speaker 1: Presumably that's why the price goes up so much because
4:31
Speaker 1: you have to buy that really inefficient, really expensive power
4:35
Speaker 1: because at this particular moment, all of the power that
4:38
Speaker 1: the like regular power plants and all of our beautiful
4:41
Speaker 1: renewable things can create is being used up. So if
4:44
Speaker 1: you have to run your AC at seventy degrees, we're
4:48
Speaker 1: gonna have to turn on this terrible power plant for you. Yes,
4:52
Speaker 1: that is the most expensive, most pollutive, and you can
4:55
Speaker 1: think of it. Only fifty hours a year does this
4:58
Speaker 1: power plant run, So they're basically compensating all of that
5:03
Speaker 1: infrastructure for fifty hours a year of running. You have
5:05
Speaker 1: to pay for that whole plant even though it only
5:08
Speaker 1: runs fifty hours. Here and the reason they have to
5:10
Speaker 1: have it is because we live in a world where
5:12
Speaker 1: we expect that we will always have power, and so
5:14
Speaker 1: they have to be like, well, we'll have this one
5:16
Speaker 1: for those crazy days when it's really hot and everybody's
5:18
Speaker 1: running the ac. Yes, that's right, And I mean, is
5:23
Speaker 1: it right that I feel like the point of your
5:26
Speaker 1: company is, at least at the beginning for us not
5:28
Speaker 1: to have to do that, Like that's kind of where
5:31
Speaker 1: I start when I think about I'm connected? Is that right? Yeah,
5:34
Speaker 1: So we're creating a little bit more flexibility in the
5:36
Speaker 1: man's side, But I would say we are a few
5:39
Speaker 1: years behind. We needed to be there as soon as
5:42
Speaker 1: solar and wind started coming into the grid at the
5:45
Speaker 1: scale look's been going in. And is that because solar
5:49
Speaker 1: and wind are less reliable than fossil fuel. So now
5:52
Speaker 1: not only do we have to worry about the peaker plants,
5:55
Speaker 1: but we have to worry about when there's clouds or
5:58
Speaker 1: when the wind stops blowing. That's exactly right. When there's
6:01
Speaker 1: clouds coming through or the wind stops blowing, you need
6:05
Speaker 1: power somewhere, and so we can either turn on of
6:09
Speaker 1: those really expensive power plants, or we can just say, hey,
6:12
Speaker 1: let's delay our start of our dishwasher washing machine for
6:16
Speaker 1: fifteen minutes or an hour, not turn that on, and
6:19
Speaker 1: then actually, we'll pay the people who are reducing or
6:22
Speaker 1: not turning on their appliances, you know, a portion of
6:25
Speaker 1: those proceeds. So let's let's get in a little bit
6:28
Speaker 1: to how that works. Right. So, if you're a power company,
6:31
Speaker 1: you're in this market where you are paying for power
6:34
Speaker 1: from different whatever owners of power plants and solar cells
6:38
Speaker 1: and whatever. You're paying for power all the time, the
6:40
Speaker 1: price is going up and down, and now there is
6:43
Speaker 1: this way where they can also pay people to not consume.
6:47
Speaker 1: And it's kind of the same, right, your PG and
6:50
Speaker 1: your utility. And you have this moment when you're like, well,
6:53
Speaker 1: either we got to turn on this super inefficient, super
6:56
Speaker 1: expensive peaker plant, or we got to figure out a
6:59
Speaker 1: way for a bunch of people to turn down our
7:01
Speaker 1: conditioners in the next half hour, right, And that's where
7:04
Speaker 1: you commit yes, and we want to basically replace those
7:08
Speaker 1: really really at inefficient expensive power plants, which is smarter
7:13
Speaker 1: usage of electricity. And one of the big technology breakthroughs
7:17
Speaker 1: that has happened over the past ten years is smart devices,
7:20
Speaker 1: So we can do that for people without them having
7:22
Speaker 1: to even think about it. So there is this moment whatever,
7:27
Speaker 1: even on a fairly normal day, right, a normal summer day,
7:29
Speaker 1: everybody's coming home from work, they're all turning on their conditioners.
7:31
Speaker 1: The power company says, oh, we're screwed. We got to
7:35
Speaker 1: turn on this really expensive, really polluting plant unless we
7:39
Speaker 1: can get people to suddenly in the next half hour
7:41
Speaker 1: useless energy. And that's where you come in, right, And
7:43
Speaker 1: so can you just walk me through what happens at
7:46
Speaker 1: that moment? Like how does the money go? How does
7:48
Speaker 1: it work? Yeah, so we have bids ride alongside as
7:52
Speaker 1: gas power plants, these really inefficient, expensive power plants. They're
7:56
Speaker 1: coming in. Say they come in at nine hundred dollars
7:59
Speaker 1: a megawatar, and we bid in at eight hundred and
8:01
Speaker 1: ninety nine dollars megalodar. That's negoets. You're doing little air
8:05
Speaker 1: quotes that negowats like the opposite of a goat, negative watts.
8:11
Speaker 1: That's exactly right. And so most power plants generate megwats.
8:14
Speaker 1: A gas power plant will generate fifty megawatts at a time.
8:17
Speaker 1: We generate fifty negowats. And the federal Energy Regulatory Commission
8:22
Speaker 1: or FIRK has said that basically, one negowat should equal
8:26
Speaker 1: one megawat, and so we're just generating a bunch of negwats.
8:30
Speaker 1: The grid will actually say, hey, we want ome connect
8:33
Speaker 1: to dispatch those fifty negowatts, and then that relieves the
8:37
Speaker 1: grid need and we don't actually have to turn on
8:40
Speaker 1: that peaker power plant. So the power company gives you
8:43
Speaker 1: eight hundred and ninety nine dollars, and you turn around
8:47
Speaker 1: and you say to your customers, turn off the air
8:51
Speaker 1: conditioner and we'll split this eight hundred and ninety nine
8:53
Speaker 1: dollars among you. Basically, yes, that's exactly it. So we
8:57
Speaker 1: get paid eight ninety nine. We pass most of those
8:59
Speaker 1: savings to our users and pay them for actually reducing
9:04
Speaker 1: their electricity. So I love the idea that the power
9:09
Speaker 1: is willing to pay for negative power in the same
9:12
Speaker 1: way they're willing to pay for power, because it's kind
9:14
Speaker 1: of the same to them. There's something a little weird
9:19
Speaker 1: about it, right on some level, Like I mean, this
9:22
Speaker 1: is obvious, and I'm sure there's an answer for it,
9:23
Speaker 1: but like, how do they know I would have used
9:26
Speaker 1: the power? Couldn't I be like, give me some money,
9:28
Speaker 1: or else I'll turn on my air conditioner like I'm
9:30
Speaker 1: weirdly sort of holding you hostage or something like. How
9:33
Speaker 1: does that part work? We use what they call a
9:37
Speaker 1: counterfactual or baseline to say what you would have normally used.
9:41
Speaker 1: And it's a very simple calculation. It looks at your
9:43
Speaker 1: last ten days, whether it's weekdays or weekends and says, okay,
9:48
Speaker 1: on average, you use from seven to eight pm two
9:51
Speaker 1: kilo lots. If you then use one kilo lot, I
9:54
Speaker 1: can actually take the one kilowat savings that you made
9:57
Speaker 1: and sell it into the market. So let's just talk
10:00
Speaker 1: a little bit about about your company, kind of how
10:03
Speaker 1: big it is, where it is, like, how big is
10:06
Speaker 1: the company? How many? How many customers do you have?
10:09
Speaker 1: What are the metrics use? We are about a quarter
10:10
Speaker 1: million customers across the US and Australia, and they are
10:16
Speaker 1: reducing on the order of two hundred to two hundred
10:18
Speaker 1: and fifty megawatts at any given moment, and so that's
10:21
Speaker 1: really between three to five power plants that we've removed
10:26
Speaker 1: from the grid. You said across the US, I mean,
10:29
Speaker 1: I know electricity markets are relatively local, right, and weird
10:33
Speaker 1: and regulated and jankie in all these ways. So are
10:37
Speaker 1: you everywhere in the US or where are you? Weird
10:40
Speaker 1: is like the perfect word for electricity markets. So right
10:45
Speaker 1: now we're in California, Texas, and New York because it
10:47
Speaker 1: is weird, and those are single state markets. There's some
10:51
Speaker 1: other areas that we're looking into, like Baltimore and Chicago,
10:55
Speaker 1: and we'll be across the entire US with a lightweight
10:58
Speaker 1: version of our product in the next year. And so,
11:02
Speaker 1: I mean, how often is it that you say to
11:05
Speaker 1: your customers, Hey, if you use less power right now,
11:08
Speaker 1: we'll give you some money. We're doing a day, Yeah,
11:12
Speaker 1: we're doing events with our customers fifty to one hundred
11:15
Speaker 1: times a year, so one or two times a week.
11:17
Speaker 1: We asked people to reduce what's a normal amount of
11:20
Speaker 1: money somebody would get paid to turn off the air
11:22
Speaker 1: condition or for an hour. Yeah, it varies, but we
11:25
Speaker 1: have anywhere between fifty dollars a year to three hundred
11:30
Speaker 1: dollars a year being earned on our platform. If you
11:33
Speaker 1: have say so per year means like per per event,
11:36
Speaker 1: it's like a buck. It's like turn off your condition
11:39
Speaker 1: for an hour, We'll give you a dollar. That's right
11:41
Speaker 1: up over time. Yeah, a good good metric is about
11:44
Speaker 1: a dollar per event per hour. So there was this
11:47
Speaker 1: day recently in California that made national news. There was
11:50
Speaker 1: a heat wave, everybody was cranking the ac looked like
11:53
Speaker 1: they were going to be blackouts. The state just wasn't
11:55
Speaker 1: going to be able to provide enough power. And then
11:58
Speaker 1: the state sent text messages to whatever to everybody saying basically,
12:02
Speaker 1: you better save energy right now or we're going down,
12:06
Speaker 1: and kind of surprisingly it worked right. Consumption went down
12:09
Speaker 1: really fast and there were no blackouts. So this was,
12:12
Speaker 1: you know, a big news story. But I'm curious what
12:15
Speaker 1: was happening at your company that day, Like, how was
12:17
Speaker 1: it for you? Well, we were in full war room mode.
12:21
Speaker 1: We actually had daily war room meetings at eight am
12:25
Speaker 1: at two pm. We were trying to figure out what
12:27
Speaker 1: else we could give to our customers to really incentivize
12:31
Speaker 1: them to reduce more. We ended up giving away a
12:34
Speaker 1: fifty dollars Amazon gift card if you were able to
12:38
Speaker 1: reduce ninety percent of your electricity or more, and ninety
12:40
Speaker 1: percent is really hard. Only a few members of the
12:43
Speaker 1: own Connect team were able to hit it, but we
12:45
Speaker 1: had thousands of own connect members being able to step
12:49
Speaker 1: up and really turn off a lot of their electricity
12:52
Speaker 1: to earn that fifty dollars gift card. I mean ninety percent.
12:56
Speaker 1: You got to unplug the fridge. That seems like the
12:58
Speaker 1: big one, right, Like I'll turn off the lights, I'll
13:00
Speaker 1: turn off the AC, but unplugging the fridge seems Yes.
13:03
Speaker 1: My mom is in the same boat, which is like,
13:06
Speaker 1: I can't believe you would tell me to unplug the fridge,
13:09
Speaker 1: but yes, Actually, the FDA allows or specifies that fridges
13:14
Speaker 1: can be off for six hours. We're turning off for
13:16
Speaker 1: about two or three hours of time, and we are
13:18
Speaker 1: turning off hundreds of thousands of refrigerators across the state.
13:21
Speaker 1: So you're offering a fifty dollars Amazon gift card to
13:25
Speaker 1: anybody who could do that for just a few hours
13:27
Speaker 1: at that key moment, that's right? And are you offering
13:30
Speaker 1: some smaller amount of money to people who were like, well, sure,
13:33
Speaker 1: I'll turn off the A C, but let me leave
13:34
Speaker 1: my fridge on. Yes. So I wasn't able to hit
13:38
Speaker 1: the ninety percent threshold, but I was able to earn
13:40
Speaker 1: about twelve dollars and I have a small apartment in
13:45
Speaker 1: San Francisco, but we were reducing for two hours. We
13:48
Speaker 1: didn't have the fan on, we turned off the refrigerator,
13:51
Speaker 1: we didn't run any appliances. So I delayed the start
13:54
Speaker 1: of my washing machine and dishwasher for a couple hours,
13:58
Speaker 1: so we got out of that critical time. That's just
14:04
Speaker 1: like the hair club for men. Guy. He's not only
14:07
Speaker 1: the president of them connected, he's so a customer in
14:11
Speaker 1: a minute. The really interesting things that Matt and ome
14:13
Speaker 1: connect have learned not about electrical power, but about human behavior.
14:25
Speaker 1: Now back to the show. Home Connect is kind of
14:28
Speaker 1: a strange company. It's, you know, the kind of thing
14:31
Speaker 1: that is somewhat hard to explain exactly how it works.
14:35
Speaker 1: And so I was curious how they got the word
14:37
Speaker 1: out when they were first starting out, and Matt told
14:40
Speaker 1: me this story about just one day early in the
14:42
Speaker 1: life of the company. That was really key. What happened
14:45
Speaker 1: was this this sort of personal finance guru called mister
14:49
Speaker 1: money Mustache tweeted about ome connect. Basically, he said, here
14:54
Speaker 1: is an easy way to make five bucks a week,
14:56
Speaker 1: and he put a link to the company's site right
14:58
Speaker 1: there in the tweet. I actually remember that day. I
15:01
Speaker 1: was at a board meeting and we saw the number
15:03
Speaker 1: is skyrocket in terms of user enrollments. It was this
15:07
Speaker 1: crazy moment of like, are those numbers right? Are this
15:10
Speaker 1: is our data being pulled correctly? And do you remember
15:12
Speaker 1: how you figured out where it came from? Yeah, my
15:15
Speaker 1: co founder Kurt started investigating. We saw everyone coming back
15:19
Speaker 1: from this Twitter thread, and then we realized that this
15:23
Speaker 1: was exploding even outside of Twitter within a reddit community,
15:27
Speaker 1: and so we started leaning into that and saying, hey,
15:30
Speaker 1: we'll figure out a way to make your energy bills
15:33
Speaker 1: lower as well as giving you money. What was the
15:35
Speaker 1: reddit community? I was a subreddit thread called beer money.
15:40
Speaker 1: Beer money. So beer money is exactly what you are right, Like,
15:45
Speaker 1: You're not going to change anybody's life, but whatever, it's
15:48
Speaker 1: it's close to free money if you know, you're like
15:50
Speaker 1: you said, if you're gonna go for a walk at
15:52
Speaker 1: eight and you can go for a walk at six
15:54
Speaker 1: instead and turn off the AC, why not get the money? Yeah,
15:56
Speaker 1: And our users really look at it that way. They
15:58
Speaker 1: don't see this as like core financial, you know, income.
16:03
Speaker 1: They see it as fun money. And so we ran
16:05
Speaker 1: this weird experiment where we're going to give people a
16:08
Speaker 1: twenty dollar gift card or twenty dollars in cash, and surely,
16:12
Speaker 1: as a pure economist, you would always say everyone's going
16:15
Speaker 1: to take the twenty dollars cash. But actually because you
16:18
Speaker 1: could just buy the gift card if you want or
16:20
Speaker 1: anything else. Yeah, exactly. And we were just shocked at
16:24
Speaker 1: everyone's like, I want a gift card, and the reasons
16:27
Speaker 1: actually made sense. They were like, if it's cash, it's
16:29
Speaker 1: just gonna go for my bills. I worked and I,
16:32
Speaker 1: you know, saved energy to make this money, so it's
16:35
Speaker 1: my money, it's fun money, and so I'm going to
16:37
Speaker 1: go splurge on myself. Huh. That's a really interesting sort
16:42
Speaker 1: of behavioral insight. So for you, it's the same, like you,
16:44
Speaker 1: you would just as soon give people cash, but they
16:46
Speaker 1: actually prefer a gift card. That's right. So I love
16:50
Speaker 1: I love the gift card versus cash example, I get it,
16:54
Speaker 1: although I would always choose the cash. Are there other
16:58
Speaker 1: sort of surprising insights that you've had that are not
17:02
Speaker 1: restricted to kind of this wonky energy market side, but
17:04
Speaker 1: more on the human behavior side. Yeah. I think that
17:07
Speaker 1: the most entrying thing that I've found is that people
17:12
Speaker 1: really have a need and a desire to save electricity.
17:16
Speaker 1: But don't know how to. I'll give you an example.
17:20
Speaker 1: We got a bunch of users early on that would
17:23
Speaker 1: send pictures of them in the dark saying, hey, I'm
17:27
Speaker 1: reducing electricity, but they would have their AC running or
17:31
Speaker 1: their washing machine running in the background, and we could
17:33
Speaker 1: actually see that in the background. And the lights are
17:37
Speaker 1: basically nothing. There's almost because of compact fluorescent and all
17:41
Speaker 1: of the most technology advancements of light bulbs, there's almost
17:47
Speaker 1: no electricity to being used there. But the AC is
17:49
Speaker 1: this enormous literally twenty to thirty light bulbs at once
17:53
Speaker 1: on equivalent, and so you just need to have them
17:58
Speaker 1: turn off the AC for for six or seven degrees.
18:00
Speaker 1: Let's just talk a little bit about power consumption at home, right,
18:03
Speaker 1: So AC is the biggest, and like, like, what are
18:07
Speaker 1: the other biggies. The easy way to think about it
18:10
Speaker 1: is anything that's heating or cooling is going to be
18:14
Speaker 1: some of the biggest usage of electricity. So AC units
18:17
Speaker 1: obviously comes to mind. But if you're in the winter,
18:20
Speaker 1: electric heating is a big portion of your energy consumption.
18:24
Speaker 1: Your refrigerator is a big portion of your energy consumption.
18:27
Speaker 1: Now a lot of those refrigerators are getting you know,
18:30
Speaker 1: much more efficient, but they're running all the time, right, Yeah.
18:34
Speaker 1: I mean I guess the other thing, like when we
18:37
Speaker 1: think about, you know, wanting to conserve, right, like I
18:39
Speaker 1: want to conserve energy, is how different the meaning of
18:44
Speaker 1: conservation is at different times? Right? There are moments, certainly
18:48
Speaker 1: now in California there's so much renewable energy on when
18:51
Speaker 1: you can actually run your air conditioner guilt free. Right,
18:55
Speaker 1: the sun is shining, electric power plants are producing electricity.
18:58
Speaker 1: It's coming to your house and you're cooling your house,
19:01
Speaker 1: and like that's the dream come true. Right, But the
19:03
Speaker 1: same house, the same AC, the same setting on the
19:06
Speaker 1: thermostat at a particular hour when there's so much demand
19:09
Speaker 1: that they've got to turn on the dirty peaker plant.
19:11
Speaker 1: Like then the AC is like a disaster. And that
19:15
Speaker 1: is so not intuitive because it's the same AC, it's
19:17
Speaker 1: the same amount of cooling. It's just contingent on like
19:21
Speaker 1: demand and the grid and the power plants that you
19:23
Speaker 1: just can't feel that as a consumer, c jcob, you
19:27
Speaker 1: are the visionary of energy. That's exactly where I think
19:31
Speaker 1: the energy sector will go is that you have free power.
19:34
Speaker 1: You basically have free energy all the time or not sorry,
19:38
Speaker 1: most of the time ninety eight percent of the time
19:40
Speaker 1: and then two percent of time you have really really
19:43
Speaker 1: expensive energy that is encouraging you to reduce or save energy.
19:47
Speaker 1: But in California, during the middle of the day from
19:50
Speaker 1: twelve to two pm, we have too much power on
19:53
Speaker 1: the grid. We are actually having to curtail solar on
19:56
Speaker 1: a regular basis. So we want you to use power,
19:59
Speaker 1: use as much power as you need. We have too
20:01
Speaker 1: much power, So it should be thought of as a
20:04
Speaker 1: free commodity of free resource except for certain times of
20:07
Speaker 1: the day. And like those times of the day are
20:11
Speaker 1: the times that home connect was created to deal with. Right,
20:15
Speaker 1: that's right, We're created to really hone in on those
20:18
Speaker 1: one or two hours a day, really balanced the grid
20:21
Speaker 1: and then pay our users for actually providing that grid
20:24
Speaker 1: support and grid service. Let me ask you this, why
20:31
Speaker 1: don't the power companies go directly to the consumers to
20:35
Speaker 1: do this? Like they already have the customers, they know
20:37
Speaker 1: my phone number. Like, why do they even need you
20:41
Speaker 1: to do this? Jacob, have you ever gotten a good
20:43
Speaker 1: experience from kand or PG? And I mean the companies
20:48
Speaker 1: are trying, so they actually have had these programs in
20:51
Speaker 1: place for decades, the challenges that they've never really focused
20:54
Speaker 1: on them as a company, and nor are they very
20:58
Speaker 1: good at engaging the consumer. So what are some of
21:01
Speaker 1: the things you sort of haven't figured out yet, Like,
21:03
Speaker 1: what are some of the key problems you're working on
21:05
Speaker 1: now that you haven't solved yet. We really want to
21:08
Speaker 1: be able to scale to the entire US, And one
21:12
Speaker 1: of the challenges you had mentioned the electricity markets are weird,
21:16
Speaker 1: and that's a perfect moniker for it. But going into
21:20
Speaker 1: each of these unique different areas coned we need to
21:23
Speaker 1: integrate with BGN, we integrate with so one of the
21:27
Speaker 1: things we're trying to figure out is how can we
21:29
Speaker 1: do it all at once and then be able to
21:32
Speaker 1: extract those revenues later. And I mean, is that just
21:35
Speaker 1: a matter of grinding out all of the regulatory stuff basically?
21:40
Speaker 1: Is that what that story is? There's forty different regulators
21:43
Speaker 1: you've got to deal with and just talking to a
21:47
Speaker 1: thousand people at forty different utilities. I mean, is it
21:49
Speaker 1: just that? Is it just boring grinding work? There's some
21:53
Speaker 1: element of that. And you know, one of the reasons
21:55
Speaker 1: we're in the three biggest states California, Texas, New York
21:58
Speaker 1: is because there's economies of scale. The grinding out of
22:01
Speaker 1: each regulatory conversation is worth it when you're able to
22:04
Speaker 1: access then five, ten, fifteen million customers. Yeah, so each
22:08
Speaker 1: sub quent one you have the same amount of grinding
22:11
Speaker 1: out for fewer customers. So it gets to be like
22:14
Speaker 1: a worse and worse deal for you over time. Yeah.
22:16
Speaker 1: But what's really great is the all of the states
22:20
Speaker 1: learn from each other very quickly, and so when you
22:23
Speaker 1: go to California and go to New York, they serve
22:25
Speaker 1: as an example to other states. Illinois as a leader
22:28
Speaker 1: in that space too. So you mean you can go
22:31
Speaker 1: to these other places and say, hey, look it works.
22:33
Speaker 1: I know it sounds weird, but trust me, hundreds of
22:35
Speaker 1: thousands of people are doing it and it works. Don't worry,
22:39
Speaker 1: we can do this. Yes, that's exactly right. We'll be
22:46
Speaker 1: back in a minute with the lightning round. Now let's
22:56
Speaker 1: get back to the show. Almost done. Let's let's close
23:00
Speaker 1: with a lightning round. Just fast. Questions Are you ready? Yep?
23:06
Speaker 1: Would you rather be too hot or too cold? Too hot?
23:11
Speaker 1: Thomas Edison or Nicola Tesla? Tesla? What else should we
23:16
Speaker 1: pay people not to do? Fly? I love this idea
23:22
Speaker 1: that you'll pay me to not run my air conditioner.
23:25
Speaker 1: I mean, is there some are there other people who
23:28
Speaker 1: will pay me to not do things? You can look
23:31
Speaker 1: at us kind of like an Airbnb or an Uber.
23:34
Speaker 1: We're providing a gig economy service. You have a latent
23:38
Speaker 1: value that is your air conditioner. And yeah, but Airbnb
23:42
Speaker 1: doesn't pay me to not rent out a room in
23:44
Speaker 1: my house. Fair? Yeah, like that's what. I don't want
23:48
Speaker 1: to rite out a room of my house. I want
23:49
Speaker 1: to not rite out a room of my house I
23:51
Speaker 1: get paid for. You could take the reverse. We're paying
23:53
Speaker 1: you to stay a little bit warmer than you normally would. Okay, okay, fair.
24:02
Speaker 1: If everything goes well, what problem will you be trying
24:05
Speaker 1: to solve In five years we get one hundred percent
24:08
Speaker 1: clean energy, and then we start to tackle the transportation sector.
24:12
Speaker 1: And if we're able to solve decarbonization of the electricity
24:16
Speaker 1: and transportation sector, that's fifty percent of carbon emissions, and
24:20
Speaker 1: there is a pathway in our lifetime to be able
24:24
Speaker 1: to solve climate change. How will you know when it's
24:27
Speaker 1: time to do something else for work? When we've achieved
24:32
Speaker 1: true scale and when I say scale. I'm talking about
24:34
Speaker 1: gigawatts of electricity under control, and gigawatts is like how
24:41
Speaker 1: many customers you need to be doing that? Millions? We're
24:45
Speaker 1: at that far for millions. If you're a two hundred
24:47
Speaker 1: and fifty thousand, you're a lot of the way there.
24:49
Speaker 1: You started zero. Well, I've also been doing this for
24:52
Speaker 1: eight years, Jacob, Okay, well, at that rate, it's going
24:56
Speaker 1: to take a while. What's one piece of advice you'd
25:01
Speaker 1: give to somebody trying to solve a hard problem, Be persistent.
25:05
Speaker 1: As long as you live another day, there's another way
25:08
Speaker 1: to solve that problem. Matt Dusterberg is the president and
25:16
Speaker 1: co founder of Home connect. Today's show was produced by
25:20
Speaker 1: Edith Russlo, edited by Robert Smith, and engineered by Amanda
25:24
Speaker 1: kay Wong. I'm Jacob Goldstein, and we'll be back next
25:26
Speaker 1: week with another episode of What's Your Problem.